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Economists raise Singapore's 2017 growth forecast to 2.5%

Economists lifted their forecasts again for Singapore's economic expansion this year, expecting it to hit 2.5 per cent.

ST PHOTO: LIM YAOHUI

ECONOMISTS lifted their forecasts again for Singapore's economic expansion this year, expecting it to hit 2.5 per cent.

This is likely to be led by the manufacturing sector, which was the only one that saw an upward revision in growth forecasts in a survey by the Monetary Authority of Singapore. Export forecasts for the trade-reliant economy, however, were lowered.

The economists' median consensus was captured in the second-quarter survey that was released on Wednesday. It came just weeks after the Singapore government expressed optimism that this year's growth, likely to be higher than 2 per cent, will be better than last year's.

Their 2.5 per cent forecast for 2017 growth is higher than the 2.3 per cent captured in an MAS survey conducted last quarter. That in itself was raised from an earlier 1.5 per cent.

This stands in contrast to all other sectors or indicators that saw a narrowing of, or no change in forecasts. Non-oil domestic exports, a key indicator of growth for the economy, are expected to expand at 5.6 per cent, slower than the earlier 6.1 per cent forecast.

The accommodation and food services sector saw the largest downward revision. It was expected to grow by 1.3 per cent when economists were polled last quarter; now they say it will expand at one per cent.

The financial and insurance sector also saw a lowering of forecast. It is now expected to grow at 1.9 per cent, down from an earlier 2 per cent. The construction sector, too, may grow at 0.2 per cent from an earlier 0.3 per cent.

Wholesale and retail trade's growth forecast remained unchanged at 1.1 per cent. Private consumption expansion was constant at 1.1 per cent.

Some 21 economists had responded to MAS for Wednesday's survey. The survey was sent out on May 25.